Tag: NBFCs

“Risk Aversion Mode” is on amongst Debt Mutual Funds

Having witnessed a series of defaults including IL&FS, DHFL etc – debt mutual funds over the past eighteen months have been steadily increasing their exposures to government/quasi government entities. This trend has accelerated post the Franklin fiasco and Covid pandemic. In June, for the first time in recent times, overall debt mutual funds exposure to Government securities as percentage of debt AUM entered into double digits. Additionally, exposure to Treasury Bills also crossed two lakh crores for the first time. […]

Partial Credit Guarantee Scheme (PCGS 2.0) : Hits and Misses

Finance Minister, Nirmala Sitharaman last week, as part of Covid Relief Atmanirbhar package had announced Partial Credit Guarantee Scheme 2.0 (PCGS 2.0) for Micro Finance Institutions (MFIs) and Non- Banking Financial Companies. The stated objective of the scheme is “to address temporary liquidity/cashflow mismatches of otherwise solvent NBFCs/HFCs/MFIs without having to resort to distress sale of their assets for meeting their commitments, and to enable availability of additional liquidity to them for on lending”. ISF in an article published on […]

Is TLTRO 2.0 just another tongue twister for NBFCs ?

TLTRO 1.0 did little to reduce the concerns of the NBFC segment which has been reeling under huge ALM stress. More than 80% of the one lakh crore capital raised by banks under the scheme went to either quasi government entities or to large AAA private corporates. Remaining was absorbed by large manufacturing corporates or large AA rating category NBFCs. Virtually nothing trickled down to smaller financial institutions who have been hit hard by the Covid-19 crisis. TLTRO 2.0 announced […]

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